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PROPERTY & CASUALTY
JUL 27, 2015
Brought to you by Amerisure
What is Telematics and How Can It Optimize Fleet Operations?
property & casualty
Derived from the dual terminology of “Telecommunications” and “Informatics”, Telematics, is a way of monitoring the movements, behavior, status, and location of a vehicle (or fleet of vehicles). Through the technology, information regarding a vehicle is sent, received and stored digitally with the goal of monitoring and/or evaluating both driver and vehicle performance. Once identified these patterns can be used to improve safety, efficiency, and refine fleet operations.
Telematics is a relatively recent entrant into the insurance business. In the 1990’s, with the advent of GPS, cell phone technology, and the internet spawned a technology boom that eventually evolved to encompass auto insurance. This evolution, a by-product of the consumer’s desire to integrate these newly available technologies into automobiles, emerged as a way to link the automobile with satellite-based technologies, allowing audio/visual data to connect with specific vehicles, allowing them to be monitored their driving and/or location-based habits.
telematics programs monitor behavior including
Number of miles
Time of day most miles
Location(s) being driven
Time of day when driving occurs
There are two main ways that telematics operations are currently employed.
First, is a program based solely on GPS-derived data.
This option monitors vehicles based on location of usage and time of day vehicles are being driven. This type of program utilizes
geographic zones categorized by risk
. Traditional geographic zone categorization is based on where the vehicle is domiciled, without taking into account where the vehicle typically spends its time throughout the day. This can be beneficial to those who are domiciled in a more “risky” zone, but spend the majority of the time away from that location.
The second program relies more heavily on the driver behaviors listed above
. With the understanding that
assessing driver behavior
, including GPS data, is the best way to determine the overall driver risk, greater emphasis is placed on the actual driving techniques on a per-vehicle basis. When combined with a web-based software program, telematics can improve fleet safety by helping fleet managers gain a clear picture of the specifics of a fleet’s operations. While not entirely absolute since multiple people can drive any unassigned corporate vehicle, it is understood that with a set of data collected over a period of time (for example, a 6-month policy period), a “composite” profile can be created for that given vehicle. A reasonably accurate risk assessment could then be assigned to the main driver of the vehicle. System features such as immediate alerts can be set up to enable ongoing coaching and training to improve driving habits. Alerts can also provide notice if vehicles are being used during
unauthorized operating hours
or even to track a driver in an emergency situation.
The tracking capabilities of a telematics program can be used to improve fleet efficiency as well. Fleet managers can map the optimal routes (and re-route as necessary) with real-time GPS tracking, allowing more service calls to be completed per day. Knowledge of vehicle location has proven an effective tool to track a stolen vehicle and assist with police recovery.
Additional benefits can include alerts reminding drivers to turn off their vehicles if they have been idling too long or notification for needed preventive maintenance.
The real-time communication technology enabled through a telematics program can be used to optimize virtually all aspects of fleet operations. No matter what the size of your fleet, looking into a telematics solution could have many advantages.